A Patch in Time Saves Nine: Liability Risks for Unpatched Software
Computer security issues are commanding rapidly increasing attention from companies, due to increases in both targeted attacks from hackers, and Internet viruses and worms that affect numerous computer systems simultaneously. For both types of attacks, an important line of defense for a company is to make sure that its computers run only updated software, including the use of "patches" to repair identified security holes. Computer security experts have long recommended prompt installation of patches, invoking the old saw that "a stitch in time saves nine." This article suggests that risks of legal liability for companies that do not apply security patches promptly are significant and increasing.
Export of Controlled Goods to Canada: Pitfalls for the Unwary
While Canada-U.S. trade relations have been historically close, and cross-border trade greatly liberalized since the entry into force of the Canada-U.S. Free Trade Agreement in 1988 and the NAFTA in 1994, the complex area of trade in defense products remains highly regulated and subject, in certain respects, to important restrictions. Significant regulatory pitfalls exist for companies with continentally integrated operations in the form of export permit requirements for items that are transferred across (and frequently back across) the U.S.-Canada border. Corporate non-compliance with these requirements, even though unintentional, can lead potentially to heavy penalties under both U.S. and Canadian law.
Civil Litigation Implications of Corporate Employees' Criminal Acts
When corporate employees engage in criminal wrongdoing, the result is often civil litigation against their employer. The criminal conviction of such employees, whether by trial or plea, or their invocation of the privilege against self-incrimination, can have serious adverse consequences in related civil litigations against their employer, even if the employee (or former employee) is not a party. This article discusses the use of such evidence against corporations.
WARNING! Employees' Entertainment May Be Employers' Headache
Most employers have come to realize that personal use of the Internet at work by employees can decrease productivity, and that employees downloading inappropriate material can lead to hostile work environment claims. What many employers have not yet thought about is the potentially explosive problems facing them as the music industry continues its crackdown on those who illegally download and share pirated music files over the Internet.
Securities Fraud and Sentencing Guidelines After Sarbanes-Oxley
In the legislative process that led to the adoption of Sarbanes-Oxley, legislators from both sides of the aisle vied with each other to establish their credentials for being tough on white-collar crime. The maximum penalties for mail fraud and wire fraud were increased from 5 to 20 years. Pub. L. No. 107-204 ' 903. The maximum penalty for willful violations of any provision of the Exchange Act or rule or regulation adopted thereunder the violation of which is unlawful was increased from 10 to 20 years. Pub. L. No. 107-204 ' 903. If this were not enough, a new crime relating to securities fraud in connection with the securities of public companies with a maximum penalty of 25 years was created. Pub. L. No. 107-204 ' 807. This does not exhaust the list, but should be sufficient to suggest that there are more than enough post-Sarbanes-Oxley criminal laws covering financial fraud to deter rational corporate officers and others from participating in financial crimes.
First Sarbanes-Oxley Whistleblower Decision
In the first ruling applying the whistleblower protections of the Sarbanes-Oxley Act of 2002, 18 U.S.C. ' 1514A, an Administrative Law Judge (ALJ) ordered a bank holding company to rehire its former Chief Financial Officer (CFO), after finding that the company fired the CFO in retaliation for reporting alleged accounting misconduct to the company's Chief Executive Officer (CEO), outside auditors, and others.
Once-Sleeping Giants Awake
Mention Institutional Shareholder Services (ISS) to a board member of a publicly held corporation, particularly a corporation with significant institutional ownership, and the reaction will undoubtedly be mixed. Why? Just as the takeovers of the 1980s spurred institutional stockholders into taking a greater role in corporate governance, so too have the corporate scandals of recent years caused a stir among once-passive institutional stockholders. They increasingly use ISS recommendations to vote their stock holdings, and as a result, ISS's recommendations are garnering a fair amount of attention in corporate board rooms.
Case Briefs
Highlights of the latest insurance cases from around the country.
